We hosted a breakfast roundtable with Insider Midlands magazine that had attendees from a range of organisations addressing housing needs in the Midlands. The discussion explored JVs in more detail.
The decision means that there is now little room for doubt that commission and overtime, both guaranteed and non-guaranteed (where it forms part of normal remuneration and where the worker is obliged to work overtime if required) will have to be included in holiday pay. The decision upholds the similar decision of the 2015 case of Bear Scotland and Others v Fulton and Others (reported here), which clarified that overtime can also be included as part of holiday pay calculations.
Mr Lock, who was employed by British Gas as a salesman, received commission for sales on top of his basic pay. When he took periods of annual leave, his holiday pay was calculated on basic pay only. However, when he was on holiday, he could not generate commission and so argued that his holiday pay calculation ought to reflect what he would have earned from commission during his holiday. Not including commission as part of holiday pay calculations meant that Mr Lock received significantly less than his normal pay during his holiday and was a disincentive to take annual leave.
The decision will mean that workers who normally receive commission and are paid less than their normal income during periods of annual leave should receive holiday pay which reflects their normal pay. This will lead to additional expense for employers who need to be aware that a failure to include such payments will open the floodgates to a whole succession of unlawful deductions from wages claims. One consolation for employers will be that, under the Deduction from Wages (Limitation) Regulations 2014 there is now a 2 year limit on the look back period for claims for holiday pay which are made on or after 1 July 2015.
What remains unclear however, is the correct reference period on which a calculation of holiday pay should be based. In Lock, it was ruled that holiday pay must correspond to the workers’ “normal remuneration” and that this was a matter for the national courts to work out by taking an average over a reference period that it “considered to be representative”. Rather unhelpfully, this practicality still remains to be determined but we suggest that generally a 12 week reference period, as applied for overtime, is used in the meantime. Until a further ruling on this issue, it is likely that Tribunals will approach the issue on a case by case basis.
For more information
To find out more about employment issues and advice please contact Kate Watkins.
The decision of the Court of Appeal in The Harpur Trust v Brazel & Unison has made clear that employers can no longer legally calculate part-time holiday based on 12.07% of hours worked over a year.
Social landlords are seeing a rising number of Equality Act defences to possession proceedings. A recent Court of Appeal decision helps shift the likelihood of such defences succeeding.
On 31 July, the consultation period ended on MHCLG’s proposals for reforming the building safety regulatory system set out in the 'Building a Safer Future' document. We have submitted our response.
For decades now, fewer and fewer services provided by local authorities have been delivered directly by them. However, over the last couple of years, there are signs that this tide is changing.
The Government commissioned an independent review of the Modern Slavery Act 2015 in July 2018. The outcome was published in May 2019 which highlighted areas for improvement.
In 2017, the NCVO commissioned a review of the tax reliefs available to charities. The brainchild of this review was published on 17 July 2019 in the form of the Charity Tax Commission report.
In 2014, the Charity Commission released its first guidance for charities on reporting serious incidents. The Commission has recently updated this guidance.
In the third part of our series on contract management pitfalls, we look at the risks and opportunities presented by instructing changes under construction contracts.
Our spotlight piece considers the role of a Senior Independent Director and sector best practice. We also explore recent developments in case law, regulatory and data protection updates, and more.
To receive invitations to our events, as well as information and articles on legal issues and sector developments that are of interest to you, please sign up to Newsroom.